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Risk Management consists of the following processes. See also Knowledge Areas - Risk.
|  Plan risk managment  ||Planning|
|  Identify risks  ||Planning|
|  Perform qualitative risk analysis  ||Planning  |
|  Perform quantitative risk analysis  ||Planning  |
|  Plan risk responses  ||Planning  |
|  Control risks  ||Monitoring & Controlling  |
"Fasten your seat belts. It's going to be a bumpy night."     Margo Channing (Bette Davis) in All About Eve
Risk management is the process of controlling risk. Risk management involves:
A risk is a potential event that may have a detrimental affect on time, cost, quality and deliverables.
An issue is a risk that has materialized. It is an unpredicted event that requires a decision; otherwise, a negative affect on the project may result.
An important concept to remember is that the project manager's role is to prevent problems proactively, rather than reacting to them as they arise. Thus making risk management one of the most critical aspects of the project manager's function.
"Intellectuals solve problems, geniuses prevent them." Albert Einstein
Risks are identified in all phases of the project. Even seemingly non-critical risks should be documented as Watch items and reviewed regularly as part of the monitoring and control process.
A common mistake that project manager's make when identifying and documenting risks is writing risk statements that are too generic. In other words, they could apply to any project, with any deliverables, at any time.
For more information on writing effective risk statements, refer to Risk Management.
During qualitative risk analysis, you determine which risks are important enough to manage. At this stage, financial values are not determined. Instead, risks are evaluated for severity and probability, and relative values (such as high, medium, low) are assigned.
During quantitative risk analysis, measurable, objective data is used to assign financial values to risks, probabilities of occurrence, and impacts. This process provides the project manager with the additional level of detail necessary to devise targeted risk responses which are appropriate and relevant.
Responses to risk threats include:
Not all risks are threats. Some represent opportunities. Strategies to respond to opportunities include exploit, enhance and share.
For more information on risk responses, refer to Risk Management.
Risk triggers are indicators that a risk event is about to occur.
Wouldn't it be great if we had the robot from Lost in Space who could warn us of pending danger to our projects?
"Danger! Danger! Will Robinson."
Unfortunately, that is not life on project "planet earth."
Instead, savvy project managers will proactively identify risk triggers, which they will monitor throughout the project to alert them to signs that risks will manifest as realized issues.
Risk triggers are the warning signs alerting project managers that a risk is imminent.
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Risk Management on Wikepedia
Risk Management Sample Questions